Hans J Marter

10 June, 2006

THE EUROPEAN Commission confirmed yesterday (Friday) that they are assessing a possible infringement of state aid regulation in relation to a planned fishmeal factory in Shetland.

Icelandic operator Sildarvinnslan (SVN) was granted planning permission to build the £10 million plant at Graven, ten days ago.

The development is supported by Shetland Islands Council who are in the process of obtaining permission to build a £6 million pier extension at Sella Ness, which would allow large pelagic trawlers to land their catches of blue whiting.

Shetland Development Trust, a local investment firm controlled by the council, is to invest £500,000 into the fishmeal plant.

The plans would also involve further expense to the council which must demolish five sheds belonging to its ports and harbours department to make room for the new plant.

There are fears in the isles that the new development near the Sullom Voe oil terminal could wipe out more than 20 fishmeal jobs at Shetland's only other fishmeal plant, operated by United Fish Products, on the island of Bressay, near Lerwick.

Critics also say that a further expansion of the blue whiting fishery is unsustainable and that the limited resource in the Northeast Atlantic does not justify another large factory in the area.

Yesterday, a commission spokeswoman for the legal unit of DG Fisheries, said she could confirm that they had received a letter of complaint and that the unit was conducting an initial assessment of a possible infringement of state aid regulations.

Valerie Tankink said she could not give any further details of the complaint as these were always treated confidentially.

She said the complaint had been made "some weeks ago". The legal department was now in contact with the "national authorities" in the UK to establish the facts surrounding the complaint.

She added that it was far too early to say whether an investigation was to be opened, which is a decision that would be made once the initial assessment had been completed.

SVN plans to dismantle one of their existing factories in Iceland and transport it to Shetland where it will be rebuilt. The company hopes to process a minimum of 100,000 tonnes of fish per year. The development will create five permanent and 10 temporary jobs.